Monday, May 25, 2009

High End Declines

It has taken far longer than we expected but the "high end" is finally getting back to merely expensive. Here's a fine example:

1324 Ramona Dr Camarillo, CA 93010
Sale History 12/30/2005: $910,000
Originally listed $825,000
Currently listed $650,000

Unfortunately this is in competition with a rental also on the golf course but includes a pool:


Let's do the math.
Rental: $4000/month.

Purchase: $140,000 upfront, lost opportunity @4%; $700/mo.
Mortgage $530,000 @6%; $3200/month
Taxes plus special assessment: $800/month.
Homemoaner Total $4700/month.

Now, I know the neighborhood. You can get the rental for $3500 or less easy. While they aren't common an equivalent rental would run $2400-$2800. So, even at a 50% decline from peak these places don't yet make financial sense in the new era.

25 comments:

strongbad said...

how do you mean 'lost opportunity' exactly?

Rob Dawg said...

$140,000 in a conservative investment, say a tax free muni can easily earn 4%. That's $700/mo you won't be getting by purchasing the house rather than renting.

Effective Demand said...

What is bad about this one.. Sellers put $228,000 down at purchase.

It is currently a short sale under contract contingent on bank approval.

Rob Dawg said...

Worse still these people bought two at the same time on this same street.

I walk by this one most mornings on my loop around the golf course. Nice little house. Quiet, well maintained. Someone will try to pay $650k but the bank will undoubtably screw up.

tk said...

Dawg,

I'm on your side on this one, but I don't follow your math.

1. Assuming your 4% is tax free earnings, you still only get $466/month for $140,000 @ 4%.

2. Mortgages are closer to 5% than 6% these days.

3. Wouldn't taxes @ 1.25% be closer to $650/month than $800/month? (I rent and don't know if this "special assessment" makes up the difference).

Anyway, even with my numbers, you'd still come out ahead renting.

Effective Demand said...

This buyer from my quickie search:

827 Callado St, Camarillo - 163k down purchased in 06
902 Drown Ave, Ojai - On market 1.199 mil , $3500 rent - Vacant, I believe family owned this since way back when. Probate sale.
1624 Calle La Cumbre, Camarillo - Paid cash in 04, took out a $500k mortgage in 2005
17 Norma Ct, Camarillo - Bought in 05 for 735k, put 147k down. On market for $499k
1957 Chapel Dr, Camarillo - Bought in 05 for 590k, put 177. down. On market now for 399k , Short pay, Under contingent contract .
3885 Germain St, Camarillo - Bought in 05 for 640k, put 160k down. Sold on 05/21/09 for 405k as a short sale.
1939 Chapel Dr, Camarillo - Bought in 05 for 540k put 177k down. On market now for 349k as a short pay. Under contingent contract.
60 Kenneth St, Camarillo - Bought in 05 for 585k put 117k down. On market now for $350k as a short pay. Under contingent contract.
10 Marine View Dr, Camarillo - Bought in 05 for 4.7 mil put 1.5 mil down. I see a loan for 500k in 2006 dont know if it replaced the 2nd or if its a third.
1324 Ramona, Camarillo - bought in 06 for 910k, put 228k down. On market now as a short pay under contingent contract.

60 Paseo Esplendido, Camarillo - Not sure whats going with this one but its on most of the properties as the tax billing address. 500k loan in 2006.


No telling how many others have been unwound before this search. I can only tell if they are current owners.

Rob Dawg said...

10 Marine View Dr, Camarillo - Bought in 05 for 4.7 mil put 1.5 mil down. I see a loan for 500k in 2006 dont know if it replaced the 2nd or if its a third.That one has got to hurt.

tk,

This is a jumbo loan so 6% is fair.

This property has taxes and a special assessment of $250/mo.

Lou Minatti said...

I am a proud Texan, and this deserves some George Strait.

Camarillo by morning, up from Thousand Oaks.
Everything that I've got is just what the bank owns.
When that sun is high in that Cali sky
I'll be f(deleted) at the county courthouse steps.
Camarillo by morning, Camarillo I'll be there.

They repo'd my Beemer in Simi, seized my accounts in Sherman Oaks.
Lost my wife and a girlfriend somewhere in East LA.
Well I'll be looking for eight when they call the magistrate,
And I'm hoping that judge ain't blind.
Camarillo by morning, Camarillo's on my mind.

Camarillo by morning, up from Thousand Oaks.
Everything that I've got is just what the bank owns.
When that sun is high in that Cali sky
I'll be f(deleted) at the county courthouse steps.
Camarillo by morning, Camarillo I'll be there.
Camarillo by morning, Camarillo's where I'll be.

w said...

But they get to keep the golf balls they find in their living room right? What's that worth?

Seriously though, what do you guys think of playing interest rate arbitrage with a home equity line fixed at 4.65% for 30 years?

After mortgage interest deduction on the first 100k (I heard that may be the limit the IRS allows) and investing the money in CDs or some such safe vehicle it would not cost much to carry this hedge. The upside could be fantastic.

Does anyone here have a thought about future interest rates, say 2-3 years from now.

Arthur said...

So Camarillo is loosing its Brillo?

Aaron said...

anyone else think that the government succeeded in keeping the market from tanking below 6500?

Today's CaseShiller number should have tanked shares like SRS. instead the markets are up? WTF. It's just about impossible to play the markets when they act so irrational.

Jean ValJean said...

The Great Ethanol Scam

chickenlittle said...

What ever happened to that place you seemed to have your eye on? The one with the koi ponds?

Rob Dawg said...

chicken,
410 Avocado is still in rehab. The Koi Pond is gone, the lot scraped of all landscaping, the wierd stuff stripped. the entire house was re-dry walled with new mid grade vinyl windows installed. Then... it "stopped." Progress has been glacial for the last few months.

Nick from Canada said...

So is Angel under the bus?

Akira said...

Without The Koi Pond 410 Avocado doesn't have a chance.

P.S. Thank God I only visit L.A. for funerals and weddings.

w said...

What no takers on the Home Equity arbitrage question?

Oh, well. Back to the old stand-bye.

Here is a new listing that seems like it may be a cousin of 410 Avocado. It is a short sale now so it seems to have stalled as well. I think it is a pretty good deal. I drove by today and the location is pretty nice.

1800 Via Montecito

w said...

I thought of you a few weeks ago Rob when I saw this properties price reduction.

11771 Foothill RdI believe they already took an offer below the newly reduced asking price. I looked at this property about 18 months ago back when they still wanted about 2.2 million for it. It is an absolutely awesome location at the entrance to Aliso Canyon. Insane views and a bunch of very profitable young healthy avocado trees.

For myself I like to peruse the farms in Virginia dreaming of returning to my childhood home.

This one looks very nice (It is the one with the 4 pictures at the top of the page).

w said...

Akira, It think Koi is so 2006. I am looking ahead and really want a salt water Octopi pond.

tj and the bear said...

NO Pets or Smoking please.

WELL!!! I guess I'll just have to take my dog & my stogies somewhere else!

Ashley said...

Gov. Schwarzenegger needs to be frog-prepped.

serinitis said...

Casey could not figure out how to remove the private from his blog so it is now at a new place http://bloggycasey.blogspot.com/

Jean ValJean said...

Whoever did that site: my non-anal-cleansing hat is off to you.

Great job.

Jean ValJean said...
This comment has been removed by the author.
Jean ValJean said...

From facing foreclosure to facing success! All this debt is gonna get paid off in no time at all!--Casey Serin, 5/2/2007.


http://iamfacingforeclosure.com/215/brainstorming-in-lake-tahoe/